Artículo 10. Information and Communication

.28 Information System Relevant to Financial Reporting. The auditor should obtain an understanding of the information system, including the related business processes, relevant to financial reporting, including: The classes of transactions in the company's operations that are significant to the financial statements; The procedures, within both automated and manual systems, by which those transactions are initiated, authorized, processed, recorded, and reported; The related accounting records, supporting information, and specific accounts in the financial statements that are used to initiate, authorize, process, and record transactions; How the information system captures events and conditions, other than transactions, 16 that are significant to the financial statements; Whether the related accounts involve accounting estimates and if so, the processes used to develop accounting estimates, including: The methods used, which may include models; The data and assumptions used, including the source from which they are derived; and The extent to which the company uses third parties (other than specialists), including the nature of the service provided and the extent to which the third parties use company data and assumptions; and The methods used, which may include models; The data and assumptions used, including the source from which they are derived; and The extent to which the company uses third parties (other than specialists), including the nature of the service provided and the extent to which the third parties use company data and assumptions; and The period-end financial reporting process. Note: Appendix B discusses additional considerations regarding manual and automated systems and controls. Note: The requirements in AS 2601, Consideration of an Entity's Use of a Service Organization , with respect to the auditor's responsibilities for obtaining an understanding of controls at the service organization apply when the company uses a service organization that is part of the company's information system over financial reporting. Note: For critical accounting estimates, 16A paragraph .18 of AS 2501, Auditing Accounting Estimates, Including Fair Value Measurements , provides that the auditor should obtain an understanding of how management analyzed the sensitivity of its significant assumptions to change, based on other reasonably likely outcomes that would have a material effect on its financial condition or operating performance, 16B and take that understanding into account when evaluating the reasonableness of significant assumptions and potential management bias. .28A When a company uses the work of a company's specialist, the auditor should obtain an understanding of the work and report(s), or equivalent communication, of the company's specialist(s) and the related company processes, including: The nature and purpose of the specialist's work; Whether the specialist's work is based on data produced by the company, data obtained from sources external to the company, or both; and The company's processes and controls 16C for using the work of specialists. .29 The auditor also should obtain an understanding of how IT affects the company's flow of transactions. ( See Appendix B.) Note: The identification of risks and controls within IT is not a separate evaluation. Instead, it is an integral part of the approach used to identify significant accounts and disclosures and their relevant assertions and, when applicable, to select the controls to test, as well as to assess risk and allocate audit effort. .30 A company's business processes are the activities designed to: Develop, purchase, produce, sell and distribute a company's products or services; Record information, including accounting and financial reporting information; and Ensure compliance with laws and regulations relevant to the financial statements. .31 Obtaining an understanding of the company's business processes assists the auditor in obtaining an understanding of how transactions are initiated, authorized, processed, and recorded. .32 A company's period-end financial reporting process, as referred to in paragraph .28e, includes the following: Procedures used to enter transaction totals into the general ledger; Procedures related to the selection and application of accounting principles; 17 Procedures used to initiate, authorize, record, and process journal entries in the general ledger; Procedures used to record recurring and nonrecurring adjustments to the annual financial statements (and quarterly financial statements, if applicable); and Procedures for preparing annual financial statements and related disclosures (and quarterly financial statements, if applicable). .33 Communication. The auditor should obtain an understanding of how the company communicates financial reporting roles and responsibilities and significant matters relating to financial reporting to relevant company personnel and others, including: Communications between management, the audit committee, and the board of directors; and Communications to external parties, including regulatory authorities and shareholders.